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Portrait of a students using laptop in university libraryOn March 31, 2017, U.S. Citizenship and Immigration Services (USCIS) released new guidelines that have left the American technology industry concerned for the fate of their future hiring practices.

The new regulations signal a sea change in accepted policies that allow IT firms to seek out the best talent from anywhere in the world.

The memorandum offering the new guidelines stated:

The fact that a person may be employed as a computer programmer

and may use information technology skills and knowledge to help an
enterprise achieve its goals in the course of his or her job is not
sufficient to establish the position as a specialty occupation.

In practical application, this could signal a shift from allowing mid-level programmers access to H-1B Visas. Mid-level programmers are typically those with undergraduate degrees in computer science or technology related fields. However, it could also include experienced programmers without a degree.

Supporters of these new rules say it will open the doors to a new influx of American workers with similar skills.

Skills Requirement is Now Higher for an H1-B Visa

The concept behind this shift is that the H1-B Visas were designed for “specialized” workers who are highly trained in a specific area, such as information technology. But the foundational attitude behind the new ruling suggests that far too many IT jobs have been taken away from American workers.

Last fall, The Mercury News suggested that companies like Disney, Southern California Edison, and UC San Francisco have been laying off Americans and replacing them with lower cost H1-B Visa holders. They went on to cite a Government Accountability Report that said more than one-half of all H1-B workers end up in entry-level roles.

The Trump administration claims that these American companies and others are abusing the H-1B program, using it to hire foreign workers at a much lower cost than American workers. However, in early April 2017, a new report by the San Francisco Chronicle showed that mega-technologists Apple, Facebook, and Google are not leveraging the H1-B Visa program to hire programmers at a lower cost.

The three companies that do have a track record of hiring lower-paid workers from overseas include Infosys, Tata, and Wipro—the report says all three have been the recipients of labor-related lawsuits. Tata and Infosys have even been subject to questions from a Senate panel on this issue.

But by comparison, the average salary for an H-1B worker at Apple, Facebook, and Google was roughly double what these companies paid. According to the San Francisco Chronicle, approximately 10% of all H1-B Visa holders in the United States were employed by Silicon Valley businesses last year. In 2015, roughly 177,750 H-1B Visas were approved with more than 69% going to workers from India.

Next Steps for the H1-B Visa

These new rules will affect the 2018 lottery as well as any companies sponsoring H-1B Visa candidates in the future. In fact, Reuters reported earlier this year that the Trump administration is considering scrapping the lottery system altogether.

It is expected that these new rules will require businesses to submit additional documentation illustrating the complex nature of the job and the unique qualifications in science, technology, engineering or mathematics (STEM) that will be required to complete the work.

It is possible that applicants with degrees of less than a Master's level will not be granted the H-1B. Too, any roles that pay entry-level wages will certainly be suspect. Supporters of these changes say it will help stop the outsourcing of American technology jobs to overseas companies that pay and cost less.

Part of the problem is how these guidelines were released. It occurred after the application filing process for 2018 had started. So, companies that had already begun the H1-B Visa process based on rules established nearly 17-years ago are now in limbo as to the outcome of their applications. According to Axios, lawsuits are to be expected.

With an additional announcement in April, USCIS seems to be targeting their enforcement of these new operating practices in the following ways: 

  • By red-flagging corporations who cannot validate their primary business functions;
  • Targeting companies who get most of their employees through the H-1B Visa process;
  • Looking more closely at businesses that employ H1-B Visa holders off-site at another location (such as India).

USCIS suggested in a later statement that they would be visiting  workplaces to confirm that employers are making a "good faith effort to recruit U.S. workers." The memo did not divulge how they would prove this.

While these changes were designed to stop companies in India or other countries that partner with American firms to provide outsourced workers, they may also affect start-up businesses in the technology sector. A San Francisco Chronicle article interviewed a number of tech start-ups who suggested that these new rules favor the biggest corporations who can afford to pay more for their tech talent.

Congress is currently considering legislation that would require moving the minimum salary range for H1-B Visa holders from $60,000 to $100,000. The Chronicle article shared the story of Stephan Goss, who entered the U.S. on a student visa in 2007 and went on to found Zeeto, whose current revenues are $41 million. But when Goss founded the company, he was making considerably less than the six-figure minimum proposed by Congress.

Many start-up businesses say this will be very problematic for new companies that simply cannot afford to pay the higher salaries found at more established firms.

Help with H1-B Visa Process

The USCIS has sought to clarify their April memorandum, stating it was issued strictly to eliminate discrepancies between how the H1-B federal processing centers were conducting business. However, the practical application of these new guidelines is still up in the air, so enforcement could vary.

For employers seeking skilled STEM workers through the H1B-Visa process, establishing a relationship with a skilled, experienced legal team will be crucial. The H1B-Visa process has traditionally been complex. However, with more rapid rule changes on the horizon, your company may need help. Katz Law Office Ltd. provides a complimentary consultation for businesses seeking assistance. Contact us to find out more.

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